CarMax (KMX-N)

The used car market will improve, especially if interest rates are indeed peaking as many feel.

Their quarter topped sales and profit estimates. Fantastic. It's what she's been waiting for. Used car units are down 10%, but a quarter ago they were down 20%. Shares have been rising since March but peaked at $155 in 2021 and today trades at $85. Carmax's inventory has been building, unlike their peers, while their online operations are strong. Prices are stabilizing and let's see if that continues, up 1% YOY and 4% during the quarter. This trend will help Carmax. 

They report tomorrow. Used cars were in recession last year because there were few new cars, so people kept their existing cars. Now, there are more used cars while prices are holding or starting to rise. She expects them to say business is picking up. She's happy with it.

Up 40% since March, but -50% from its peak. The used car market is starting to improve. Starting to see an uptrend with this stock.

The used car market will pick up because people are buying new cars.

Carmax reports Tuesday. You can't expect them to do well with the cost of financing a car doubling from a year ago, though business should remain good.

To play the used car market in the U.S. Has looked at Carvana, but doesn't know CarMax well. They have a digital online presence to attract customers, and they offer guarantees for their cars. They project high-single-digit growth, but the PE is not cheap. He's not totally against buying KMX, but slightly prefers Carvana.

They report Friday. Used cars are booming, because carmakers like GM are stuck with the semiconductor shortage. He doubts Carmax will say that used cars are more plentiful, though. This stock could be tough.

Recent quarterly results showed they generated on an annualized basis about $1 million pre-tax which gives an extreme multiple of 4 X the market multiple. In electronics and selling in the niche markets with a high infrastucture cost base.